Big Pharma outfits like Pfizer and Merck spend millions marketing drugs to the masses. But biotech pioneer $6 billion(sales)Genentech takes a very different approach. It eschews mass-market medicines in favor of compounds for severe diseases--even if that means limiting the market to those most likely to benefit. The decision to bring a drug into trial, says Chief Executive Arthur Levinson, is "98% science, 2% commercial."

Genentech is reaping the benefits. It has developed three of the most important targeted cancer drugs to date:Herceptin for breast cancer, Rituxan for lymphoma (comarketed with inventor Biogen Idec)and Avastin for numerous tumor types.Genentech estimates 2005 per-share earnings growth of 50% and an average 20%for the rest of the decade. Sales of Avastin, approved in 2004, neared $1.2 billion last year and could hit $4.7 billion by 2009, says Friedman, Billings, Ramsey analyst Jim F. Reddoch.

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